By Matt Buxton | Fairbanks Daily News-Miner

FAIRBANKS — It was all about the future of affordable energy for the Interior when Gov. Sean Parnell visited the Greater Fairbanks Chamber of Commerce on Tuesday. To a packed room at the Carlson Center, Parnell announced continued progress to truck natural gas to Fairbanks as well as a milestone in the state’s partnership with North Slope oil producers to build a large-diameter natural gas pipeline.

“I’m pleased to announce here today that we terminated the license with TransCanada under AGIA,” said Parnell, announcing the end of the Sarah Palin-era Alaska Gasline Inducement Act that failed to produce a pipeline from the North Slope to the Lower 48.

The state and Canadian pipeline company Trans-Canada formally ended the AGIA license, clearing the way for the state to pursue a new pipeline project with the major North Slope oil producers.
The next step, said Natural Resources Commissioner Joe Balash will be for the state to sign a joint-venture agreement with producers ExxonMobil, BP and ConocoPhillips as well as TransCanada, which will be working on behalf of the state and bringing its own money to the table.

The agreement will allow the state and the parties to proceed with pre-engineering design and cost estimates on the 800-mile pipeline project. Parnell said the Legislature would be expected to review the results of that work and decide on whether to proceed during a special session sometime next fall.

The producers still need to sign the agreement, and The Associated Press reports that progress is mixed on that front. Both ExxonMobil and BP spokeswomen confirmed that the companies are ready to sign the agreement, but ConocoPhillips’ spokeswoman said there were still unspecified issues to be resolved. TransCanada is expected to continue to be involved in the project, even though its previous efforts to deliver North Slope gas to Lower 48 markets came up short when markets shifted.

Parnell said he felt the current project is the state’s best path to finally see a decades-long goal of building a natural gas pipeline accomplished.

“This Alaska Liquefied Natural Gas project is on a more traditional path,” he said, referencing the structured and staged approach to design and construction decisions. “It’s designed with more flexibility.”

Parnell also spent time focusing on the progress of the Interior Energy Project, which aims to begin trucking natural gas to Fairbanks, North Pole and the surrounding areas starting in early 2016. He said the next stage is for the local utilities, including Golden Valley Electric Association, Fairbanks Natural Gas and the Interior Gas Utility, to commit to buy natural gas.

Parnell’s speech hardly focused on the pending effort to repeal his signature oil tax bill, Senate Bill 21. The sole mention of oil taxes came during the update on the natural gas pipeline, when Parnell said the pipeline is being made possible by the “healthy oil business” created by the passage of Senate Bill 21. The bill is the target of a repeal effort and industry groups have already poured in millions of dollars to defeat the repeal and protect the bill.

Parnell said his lack of talk on it was a consequence of his limited time to talk. The Greater Fairbanks Chamber of Commerce was not shy about its position on the repeal and asked the audience twice to vote no on the repeal come the August primary election.

Contact staff writer Matt Buxton at 459-7544. Follow him on Twitter: @FDNMpolitics.